Oppenheimer's Fadel Gheit Accuses Goldman Of Manipulating Crude Market

Tyler Durden's picture

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Cognitive Dissonance's picture

Too funny.

That is where government comes in and says stop, enough.

That's like asking your right hand to amputate your left hand. Not going to happen when they both share the same brain and control system. It will take a third person or entity to amputate the gangrenous Goldman Sachs and company.

Votewithabullet's picture

OOH OOH I'm going to get a hugh photo of Muhammed and drape it over 85 Broad and blame it on lloyd. sign it turk 182

Texas Gunslinger's picture


......is nothing more than just the latest example of what we have claimed over and over is outright market manipulation.....

Not so fast.  ZeroHedge and its readers have routinely mocked the idea that speculators are to blame for the dramatic movements in commodity prices. WIth commodities, the theme here has always been the same:  Bernanke's fault - and anyone who said otherwise was ridiculed. Now, suddenly, manipulation is to blame?

If we are now accepting the fact that speculators (GSCI) are to blame, does this mean ZeroHedge disagrees with Rick Santelli's claim that the 2008 oil run was NOT the result of manipulation and speculators? This article clearly pins the blame on GSCI, yet Santelli has repeatedly dismissed the role of speculators in the oil market, and their ability to jack prices away from true supply/demand equilibrium.  According to CME's favorite talking head, contracts wouldn't continue to roll forward if the implied demand wasn't true. So who's right, Santelli or ZeroHedge?

I'm not quite sure why Santelli is so revered by ZeroHedge readers, especially since he's spent the past 30 years at the CME - the very same organization that hiked margin requirements 57 times this year on silver.  Does anyone think that maybe, just perhaps, a 30 year career with the CME might distort one's credibility when discussing the role of speculators in the market?



jus_lite_reading's picture

"Of course, if Oppenheimer was large enough and influential enough to do what Goldman does, we are 105% confident Fidel would be singing a totally different tune."

Truth in jest. Remember money is the root of many of man's evils. Once a person is able to have a moment of clarity and realize that money is only a limited protection but meaningless without happiness... he can be free. As you said if the tables were turned he would sing another tune.....

Temporalist's picture

It is not money that is the root of evil it is the lust of money.


"The original biblical quotation means "the love of money is the root of all evil" (or all kinds of evil), and has been translated into English as such since the King James Version.[1] However it has frequently been mistranslated as "money is the root of all evil", and the latter has become well-known misquotation."


jus_lite_reading's picture

I stand corrected then. You are correct... its the love of money that is the evil. And that love of money is in modern terms 'greed'... its game over for them. I am out early and all in gold/silver. I trade, invest or speculate no longer. I see no reason to get caught perpetuating this last ponzi called the global stock markets... a rigged casino...

Ruffcut's picture

He is bitching and whinning about "where's the "me too"".

The fund contributions are down, their redemptions are up and they are scratching for bonuses. 

Cry-fucking babies. Cry me a river, for they would be robbing at will, if given half a chance..

Orly's picture

Now, the cannibals start eating themselves.  This should get very interesting...

jus_lite_reading's picture

Actually they have been living off of us and will continue until the world ends. Which is as soon as FUKKYOUSHIMA BLOWS!!!


HOLYSHIIIT!!!! AND SO IT BEGINS!!!! 70k people being evacuated!!!

Cognitive Dissonance's picture

Do you prefer a leg or breast? I prefer the tender rump roast, but what do I know.

I wonder if Tyler will piss in the lobster brain bisque?

Votewithabullet's picture

Fadel is as honest as that bow tie wearing interest rate observer sour puss. Besides Allah dont play that.

Gubbmint Cheese's picture

Wow - shocked the video feed wasn't killed during that interview.


Pegasus Muse's picture

Guanteed it would have on CNBC. 

AZSovreign's picture

The Squid controls the world, Kill the squid and the tentacles will die off.

SheepDog-One's picture

Those kind of boobies right there actually control the world! Hell with these old Zionist farts at GS, boobies!

AZSovreign's picture

That's right Dog!!! These babies will be the new control mechanism of the NWO (Nipple World Order).

Dr. Richard Head's picture

I would gladly be a serf in your NWO.

Cash_is_Trash's picture

Boob jobs included in the expanded Nipple World Order healthcare.

AZSovreign's picture

*Announcement* NWO has been changed!! for reference please kindly refer to the NWO as the:


Nipple World Orgy™


All references to the New World Order only relates the the old crusty dried penis mofo's who are currently in control.

I am a Man I am Forty's picture

completely obvious to any awake and interested observer

Ray1968's picture

When the masses gets pissed, stop picketing Exxon. Picket GS and JPM.

CrashisOptimistic's picture

Why picket any of them?  Oil scarcity is the responsibility of no one, and there's nothing to be done about it.  

Party's over.  The cops are coming.  On horses.  Four of them.

Flakmeister's picture

Party's over.  The cops are coming.  On horses.  Four of them.


Classic.... this one is a keeper.

CrashisOptimistic's picture

You know, the thing is, NYMEX gets reports from both refineries and shipping terminals of prices paid.  So the front month may be pushed around, but the price that someone pays for the actual liquid (spot) is real.

Bottom line: Those Saudis really stepped up and pumped more oil, didn't they?  As in, no.  You pretty much can't believe a single thing coming out of Aramco nowadays.

CrashisOptimistic's picture


You have to take into account that we see these numbers don't mean much unless they are consistent. We have not seen a trend yet, but definitely higher gasoline prices at the pump will curtail driving. By how much, we do not know. Some companies say as much as a 5% drop from last month. 


Moron.  GET YOUR MIND CALIBRATED.  High price doesn't affect consumption of a zero elasticity item.  People HAVE TO DRIVE TO LIVE.  Demand destruction IS NOT DISCRETIONARY.  There is no discretionary driving anymore.  Demand destruction is JOB DESTRUCTION.  People don't drive if they have no job.  It's not a discretionary decision where someone casually says  . . . oh, I guess we won't take that sunday drive in the country because gasoline is expensive.  No!  What happens is high price kills economic activity, the guy loses his job, and then he doesn't drive to work.

MrBoompi's picture

I see your point, but respectfully disagree. A percentage of our gasoline consumption is discretionary. How much I can't say, but 10-20% is not out of the question.

It's not the same as food. If I can't afford steak I can still buy hamburger. If I can't afford Regular there is no other option but to stay at home or hitchhike.

CrashisOptimistic's picture

Discretionary burning of gasoline is what was squeezed out of habit patterns . . . certainly in 2008, but likely even before.  

Do you hear about Sunday drives with the family anymore?  

The point is the nuance of Demand Destruction must not be spun.  They will try to spin it as "wasteful burning of gasoline ends" and that's crap.  Demand Destruction is destruction of economic activity because all such comes from oil.  

The econo-finance-moneyfromnothing folks hate to think in those terms because once that is recognized, that GDP comes from oil, then they realize they have no more power.  

Bernanke can print what he wants, people can bid Gold or Silver up or down, the ECB can bailout whatever they like, but in the end it is oil that powers the tractors that plant the crops in the necessary quantities to feed 7 billion people.  When it stops doing that, holders of printed money, holders of gold, holders of bailouts . . . they all starve.  

Oil is the alpha asset.  Never forget it.

grimey's picture

on that note, i'm surprised we haven't seen more money flow into lifestyle substitutes for oil - transit oriented development, for instance, makes a lot more sense when no one can afford to drive anywhere, but i haven't heard or seen a spike in development, despite a huge market of renters and lower than ever construction labor costs. i'm sure part of this has to do with the government and the banks not wanting to finance the creation of a superior product to compete with the millions of underwater mortgages they already have on their books, but i feel like at least one bank would recognize the long-term shittiness of an investment in remote, exurban, subdivisioned single family houses in a world of rising oil prices, especially compared to medium and high-density centrally-located housing, and knows that they could at least go a long way to destroying their competitors balance sheets by offering their underwater tenants somewhere better to live.  that there isn't tells me either that the banks expect oil prices to decline dramatically in the future (maybe), have colluded and agreed to not do anything that might threaten one another's residential mortgage portfolios (not a Nash equilibrium solution,) or know that investing in urban cores might save cities from bankruptcy and thereby deny the banks the opportunity to screw the cities on unnecessary bond issuances or the opportunity to steal valuable public assets at fire sale prices. 

UGrev's picture

I kept having the visions of Mothra vs Godzilla while watching..

expectplannedevents's picture

What it really means..

The US in not EUROPE! So people have to drive to work and no idiot in Washington planned for local economies without oil!

US is the largest Oil Importer and Currency Exporter and are interdependent..

Oil is the god...everything produced traces back to it. Funny how the US controls only 5% of the world reserves! 95% is foreign companies. Yet, who is the one acting like the bully?

MrBoompi's picture

"So people have to drive to work and no idiot in Washington planned for local economies without oil!"
Excellent point. In the future we may well become an agrarian society again, where most people do not live in cities and grow their own food.

Are we planning for this? No. But can we do it? Certainly. We'll be forced to or perish.

Glasgow Gary's picture

Fadel Gheit is a clueless joke, who has got nothing right about the oil market in the last 7 years.


Flakmeister's picture

Don't know about the junking.... he is whining that they can't manipulate the markets too...

You are correct, this guy for being a high ranking oil analyst makes David Lereah seem omnipotent.

rex-lacrymarum's picture

Please allow me to correct you - Fadel Gheit has been utterly wrong on oil for a minimum of 15 years, if not longer. Why he is an 'oil analyst' only the shadow knows. One would have been short WTIC since it first crossed above $15 if one had listened to him.

swissinv's picture

subject to be sacked

buzzsaw99's picture

Captain Obvious. His comments are worthless.

WhOracle's picture

shown on bloomberg tv, it will indeed make everyone laugh.

shown on sheeple tv though, obviousness would be a shocking revelation.

MarketFox's picture

Wonder what the total monthly payment is from Goldman Sachs to Bloomberg.....



AldoHux_IV's picture

Government can't regulate nor govern-- it's the people we need to remove and nothing is going to change until that happens.

In the meantime, our country will further face the debilitating effects of the imbalances that have ravaged this economy and a further massacre of the democratic process in this country.

FOREX loop.'s picture

Is it any surprise to us ZH readers that this is happening? They already manipulated the silver market

(a good article I read on that recently is here



Big oil gets away with it again.

SilverDoctors's picture

And yet we'll never hear a peep about silver.

Did Comex Registered Silver Supplies Double Overnight? 24hourgold reports silver supplies jumped today from 32 million to 69.3 million ounces.


SRV - ES339's picture

Proprietary trading should not have any place (as in zero investment in any form) in Investment Banking... that's the only answer, but of course they get much of their income from it, so they would destroy anyone that even suggested it.

JW n FL's picture

Here more useless information from wiki! you fucking punks who share nothing other than your pussy hurst feelings should get off of wiki leaks nutz!


WikiLeaks: Saudis often warned U.S. about oil speculators By Kevin G. Hall | McClatchy Newspapers

WASHINGTON — When oil prices hit a record $147 a barrel in July 2008, the Bush administration leaned on Saudi Arabia to pump more crude in hopes that a flood of new crude would drive the price down. The Saudis complied, but not before warning that oil already was plentiful and that Wall Street speculation, not a shortage of oil, was driving up prices.

Saudi Oil Minister Ali al Naimi even told U.S. Ambassador Ford Fraker that the kingdom would have difficulty finding customers for the additional crude, according to an account laid out in a confidential State Department cable dated Sept. 28, 2008,

"Saudi Arabia can't just put crude out on the market," the cable quotes Naimi as saying. Instead, Naimi suggested, "speculators bore significant responsibility for the sharp increase in oil prices in the last few years," according to the cable.

What role Wall Street investors play in the high cost of oil is a hotly debated topic in Washington. Despite weak demand, the price of a barrel of crude oil surged more than 25 percent in the past year, reaching a peak of $113 May 2 before falling back to a range of $95 to $100 a barrel.

The Obama administration, the Bush administration before it and Congress have been slow to take steps to rein in speculators. On Tuesday, the Commodity Futures Trading Commission, a U.S. regulatory agency, charged a group of financial firms with manipulating the price of oil in 2008. But the commission hasn't enacted a proposal to limit the percentage of oil contracts a financial company can hold, while Congress remains focused primarily on big oil companies, threatening in hearings last week to eliminate their tax breaks because of the $38 billion in first-quarter profits the top six U.S. companies earned.

The Saudis, however, have struck a steady theme for years that something should be done to curb the influence of banks and hedge funds that are speculating on the price of oil, according to diplomatic cables made available to McClatchy by the WikiLeaks website

Read more: http://www.mcclatchydc.com/2011/05/25/114759/wikileaks-saudis-often-warned.html#ixzz1NONDuDNR

rex-lacrymarum's picture

The Saudi oil minister naturally would prefer it if the only entity capable of moving the price of oil were the oil cartel led by - Saudi Arabia! The fact that the Saudi oil minister has a disdain for freely traded markets should not surprise anyone.

GMRobertson's picture

A three year old could look at the graphs on oil inventory broken down by PADDs and then distillates and then gasoline and see this market is manipulated.  Crude inventories are massive, especially the largest tank farm in PADD II - we are swimming in oil.  But is is obviously being with held from refining to gas and other products as you look at the PADD for gas.  Furthermore oil is being withheld from NE and Central PADDs and instead put into storage despite the immediate loss to do so.  Capacity with refiners is in some places in the 70% - and this when gas is over $4.00 at the pump?

This Oppenheimer spiel is weak and silly, saying the comments/analysis is manipulations.  Reminds me of the goofy stuff folks said about Kaufman in the 80s at Sali.  But, I do know the oil market is now organized in ways that would gobsmack E. Craig in his heyday during the long bond auctions and makes Mozer look like a saint.

And to be clear, I suspect it is all perfectly legal based on the changes Goldman et al got the CFTC to make long ago.  ICE acts in the same way as the euro dollars did with "petro dollars" in the 70s - moves it off shore and away form prying eyes.

Where the real damage will be done when this corner ends - and it will with oil blowing past 40 to 18(?) as insult to over bidding - and as it crushes China and others and likely every major  college endowment in the USA, not to mention some dopey pension plans who never bothered to think out whether or not their benefits were paid out in oil or US $ - the real damage will be all the false price signals in a Hayek sense for now almost 6 years.

"Commodities are not an asset" - grasshopper, that's the koan.


This all started with the Katrina move - remember that?

MrBoompi's picture

Of course we know the market's rigged, and we've known it for a long time. But you never hear much about it on the news.

Our government's really on the fucking ball too. While we pay $4/gal today, they announce market manipulation schemes from 3 goddamn years ago!

Really...how fucked are we???

JW n FL's picture

The F.B.I. investigates civil rights cases.. from 80 years ago.. none where the police are still alive to be prosecuted!




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